Babbel Makes a Splash in AI-Assisted Language Learning

Summary

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Bloomberg Businessweek

Episode: "Babbel Makes a Splash in AI-Assisted Language Learning"

Date: September 17, 2025
Hosts: Carol Massar & Tim Stenovec
Guest: Tim Allen, CEO of Babbel

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Overview

This episode explores the intersection of artificial intelligence and language learning, focusing on how Babbel—under new CEO Tim Allen—is enhancing language acquisition using AI tools amid rapid technological advancements from giants like Apple and Alphabet. The discussion covers the evolving competitive landscape, Babbel’s approach to AI, its business model, and the enduring value of genuine language learning experiences in an age of automated translation.

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Key Discussion Points & Insights

1. The Rising Tide of Real-Time Translation Technology

[01:46-03:35]

• Apple’s introduction of live translation on AirPods is seen as a transformative but not replacement tech.
  • Tim Stenovec: “It automatically translates words that are spoken to the wearer... We live in the future, Carol.”
  • Carol Massar: “If you don’t have a language, sometimes you feel lost in a country. But this really kind of makes it very easy to communicate with other folks.”
• Duolingo’s stock reacted to Apple’s demo, highlighting how the market is closely watching AI-driven translation.

Tim Allen’s Take

• “Language learning is the oldest software known to man, so it’s not going anywhere.” ([02:57])
• Real-time translation increases awareness and interest in languages but doesn’t suppress the desire to truly learn and belong in a language.

2. Will AI Replace Language Learning?

[03:35-04:59]

• While technology can make translation seamless, Allen argues the desire to live and breathe in a foreign language remains irreplaceable.
  • “Short of a neural implant, people are going to always be learning languages... people will always want to learn and live inside of a language themselves.” (Tim Allen, [03:54])
• Babbel’s new AI product, Babbel Speak, blends AI coaching with pedagogy to enhance but not supplant human-led language acquisition.

3. AI as a Competitive Threat & Catalyst

[04:59-06:47]

• Introduction of powerful LLMs (e.g., GPT-5) facilitates rapid creation of language apps, but Allen sees limitations.
  • “People want to know they have a real lesson plan, that they have really the transmission of the language in a way that’s going to adapt to them.” ([05:36])
• AI enables hyper-personalization and faster content development, but trusted brands with deep pedagogical roots maintain market strength.

4. Babbel’s User Growth, Stickiness, and Market Segments

[06:47-08:41]

• Babbel is experiencing strong growth, particularly in September and during New Year’s, with “millions of subscribing customers” and thousands joining daily.
  • “Demand has not waned on this side of the equation.” (Tim Allen, [07:04])
• Corporate clients include over 2,000 businesses; a recent example is Inter Miami Football Club utilizing Babbel for custom team content.

Pricing Model

• Individual: Lifetime access at $199, or a subscription at $29.99/month. ([08:54])
• Allen: “If Tim, you came to the site and signed up... you could pay $199 for the lifetime. There's also discounts... then there's the monthly fee of $29.99.” ([08:54])

5. Babbel’s Focus vs. Diversification

[09:57-11:13]

• Competitors like Duolingo expand into other domains (chess, reading), but Babbel remains laser-focused on language acquisition.
  • “Now our specialty is language learning... all of our linguistics, all of our teachers, all of the human centric pieces...” (Tim Allen, [10:18])
• Babbel uses gamification and AI to enhance the learning journey but doesn’t plan to diversify beyond languages.

6. AI Investment & Development at Babbel

[11:13-12:51]

• Babbel has been cash flow positive since 2011, investing heavily in engineering, AI talent, and proprietary infrastructure.
  • “We have hundreds of millions of lessons completed a year. That’s very rich data to be taking into proprietary LLMs and data models...” (Tim Allen, [11:27])
• AI at Babbel enhances (not replaces) human educators: “We do use AI, but we use it with the human centric piece...” ([12:17])

7. CEO’s Personal Experience

[12:51-13:11]

• Tim Allen, who moved to Berlin for the job, is himself learning German slowly via Babbel.
  • “Using my Babbel every day, very little, but I’m learning very slowly.” (Tim Allen, [12:57])

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Notable Quotes

• Tim Allen: "Language learning is the oldest software known to man, so it's not going anywhere." ([02:57])
• Tim Allen: “Short of a neural implant, people are going to always be learning languages.” ([03:54])
• Tim Allen: “People want to know they'll have a real lesson plan, that they have really the transmission of the language in a way that's going to adapt to them.” ([05:36])
• Tim Stenovec: "That's a lot less expensive than competitors such as Duolingo, which is, you know, that plus some, I think per year." ([09:14])
• Tim Allen: “Now our specialty is language learning... all of our linguistics, all of our teachers, all of the human centric pieces…” ([10:18])
• Tim Allen: “We do use AI, but we use it with the human centric piece...” ([12:17])

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Key Timestamps for Important Segments

• 01:46 – Apple’s translation feature and implications for language learning
• 02:37 – Interview begins with Tim Allen (Babbel CEO)
• 02:57 – Allen on the enduring need for language learning
• 03:54 – The limits of wearables and real-time translation
• 04:59 – AI’s role in app development and competition
• 05:36 – Importance of pedagogy and trusted guidance
• 06:47 – Babbel’s recent growth and user metrics
• 08:54 – Pricing details: lifetime vs. subscription
• 10:18 – Babbel’s specialty and focus versus competitors
• 11:27 – AI, data, and investment at Babbel
• 12:17 – AI and human collaboration in content creation
• 12:57 – CEO Tim Allen’s personal language learning journey

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Tone & Speaker Dynamics

• The conversation is lively, future-focused, and pragmatic.
• Tim Allen is optimistic, measured, and emphasizes a hybrid approach—valuing both human expertise and AI enhancement.
• Carol Massar and Tim Stenovec bring industry curiosity and challenge assumptions about the disruptive threat of AI to established practices.

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Summary:
Babbel’s CEO views generative AI and real-time translation tools as market expanders, not existential threats. Babbel leverages AI to personalize and accelerate learning while doubling down on pedagogical rigor and human-centric design, continuously attracting both individuals and enterprises. True language acquisition, they argue, remains an essential human endeavor—something even the most groundbreaking technology complements, but does not replace.

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Transcript

[Narrator/Announcer]

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[Tim Stenovec]

At Apple's big event last week, a lot of the focus was of course around the iPhone. It makes sense. It's the most important product for Apple. What got my attention and this is what I talked to my wife about, like the next day, the new translation function on the AirPods.

[Carol Massar]

It's so cool.

[Tim Stenovec]

So it automatically translates words that are spoken to the wearer and then the user can then speak back and show the translation live on an iPhone to another person. We live in the future, Carol.

[Carol Massar]

I mean, it's really amazing. It's like, okay, so if you don't have a language, sometimes you feel lost in a country. But this really kind of makes it very easy to communicate with other folks.

[Tim Stenovec]

So it raises the question about how we're going to use language in the future. And in fact, on that day we saw Duolingo shares were up as much as 6%. Then Apple showed off the new feature. The stock fell. So someone I'm Sure. Who watches this closely? Tim Allen. He's CEO of Babbel, the language learning platform. He joins us from Berlin. Tim, good to have you with us. How are you?

[Tim Allen]

I'm good. Thank you for having me. I really appreciate it.

[Tim Stenovec]

Yeah. Congratulations on the new gig. I'm curious how you watch the tech in the space and I know you have some really interesting stuff that you and the team are doing around AI, but how do you watch the tech coming from Apple or Alphabet that are now offering this real time translation? Does it, does it make it so we're not going to need to learn languages in the future?

[Tim Allen]

You know, language learning is the oldest software known to man, so it's not going anywhere. What I love about what Apple and Google have done is it actually generates more interest in this space. So what we find interesting, especially on our product, Babel, is when users or learners go to take a trip or go into a foreign country, they actually come back and they're more interested in learning the language. So we see all of this as a tailwind because we think that ultimately, you know, I think the technology is really cool as well. Right. It's so interesting. Put in AirPods, you can go from one to the other, but what people will then do is adopt and go, oh, I really want to get into the language. I really want to belong in the language.

[Tim Stenovec]

That's happening right now because volume. Well, so Tim, I get that that's happening right now because that technology isn't widespread, but I can just imagine in a few years, you know, we won't even need, maybe we won't even need another device. We'll have it. Just, it'll be a wearable and then it'll be even more seamless. Do you see that continuing to drive demand?

[Tim Allen]

What's interesting about that is like I think short of a neural implant, people are going to always be learning languages, right? So that in a universal language, those are the two things that could disrupt the market. So what will end up happening is that the iPhone, when it came out, everyone declared the death of language learning, right? Because you could hold up your phone, you could do the same translation that the AirPods are offering today. Even a wearable can do it. The difference is that people actually want to live and breathe inside of the language. In fact, we just launched a part of our new technology that, that explores AI that brings both the pedagogy and the human learning aspect of it, together with AI called Babel Speak. And what that does, it allows people to actually practice the language of the learning with, with an AI coach, an AI tutor. So there's predefined conversations you can practice with. It does small corrections. But we see this as a compliment. We see this as a way for people to actually learn and accelerate the transmission of the language. I think the new technologies are really going to allow for dabbling inside of a lang. Going to be great on the go, it's going to be great for those one time use cases. But people will always want to learn and live inside of a language themselves.

[Carol Massar]

How do you view the more generally Tim, kind of the landscape of learning apps? With the introduction of GPT5, we saw the team create a custom language learning app in minutes during the demo.

[Tim Stenovec]

That's cool.

[Carol Massar]

I mean it's kind of amazing how quickly all this is happening and how quickly you can do things. Do you view AI products like this is a real competitive threat and what can you do to keep your user base and sustain growth?

[Tim Allen]

Yeah, I watched the same demonstration. It was a cool French app that they had created. It has limitations.

[Carol Massar]

Was it cool or were you like, oh my God, this is going to be what was difficult for us.

[Tim Allen]

What was cool? No, definitely not an oh my God. It was a cool because it was created so quickly. And what I think is so cool about it is people are starting to learn on demand. What the difference is though is I think that people will want to pedagogy, they'll want lessons, they'll want content, they'll want to be able to actually know that they're getting a trusted guide through the language learning process. Large language models, as you know, are good at many things, they're good everywhere. They've been declaring for now almost two years that they're going to take away all of the jobs and you know, just really disrupt all the markets. But I think what ends up happening is when you start to get into really narrow spaces such as language learning, people want to know that they have a real lesson plan, that they have really the transmission of the language in a way that's going to adapt to them. And that's what we think AI is going to empower inside of. We think it's really going to allow for the personalization of your individual learning plan. But with the content, the pedagogy, the transmission, so you retain, you're able to speak it, you feel fluent and you actually feel comfortable with it. So I think from a build perspective it's really interesting. We look at it as a tool to really help facilitate and go to market a lot faster. I Think from a transmission and a trusted content. It'll actually end up being niche markets with real players such as ourselves.

[Carol Massar]

All right, so the truth will probably be in usage or the stickiness. And I'm assuming then you're seeing signing up more and more people, you're very enthusiastic amid all of this potential competition. So give us an idea of customers, users, people sticking to the platform. Give us some metrics.

[Tim Allen]

We're, we're growing, we're going on. We have large demand. In fact, September is one of our larger months. Just give it the back to school and back to office after the summertime that in New Year's. As you can tell, the New Year's resolutions tend to be really heavy periods for us. What I can say is we have millions of subscribing customers. We're signing up thousands every single day. Demand has not waned on this side of the equation. We're really excited about the future. I actually get more excited about more of the players showing interest and actually saying, hey, look, this is cool. Understand a language, play with the language. But when you want to go really learn a language, go to the providers you trust.

[Carol Massar]

Tam, you say millions. It'd be great if you get 1 million is a lot different than 10 million or 20 million. So just give us an idea, if you could. And how much is corporate versus kind of individual? And what are folks paying for a subscription? And how long do they stay with you?

[Tim Allen]

Yeah, no problem. We have over 2,000 business clients, B2B clients. So I can tell you that we just signed Inner Inter Miami Football Club. They're using it for their players, their coaches, their teams in order to teach them the languages and what they need to be. We've created custom content for them as well, which gets really exciting. But I can tell you it's millions of consumer of consumer customers. And I can tell you it's more than 1 million and it's more than 2 million and it's more than 3 million. So it goes on up from there. Yeah, so.

[Carol Massar]

And what do people pay? Corporate versus individuals.

[Tim Allen]

Yeah, yeah. So on individuals, there's a variety of packages, as you can imagine. There's a variety of price points. We have a lifetime price point that we can, that users can subscribe for life and they get all of the features and all of the things that we actually upsell to. And then, you know, there's monthly plans. It is the normal subscription model for what users want from any moment in time.

[Carol Massar]

All right, but give me an idea. So Tim wants to learn what Language.

[Tim Stenovec]

Spanish.

[Carol Massar]

Spanish.

[Tim Stenovec]

Practice my Spanish.

[Carol Massar]

He just wants to kind of learn Spanish. So give us an idea. So he signs up and what would he be paying? Like on a monthly basis or. If you wanted the lifetime.

[Tim Allen]

Yes. Yeah, yeah. So if Tim, you came to the site and signed up and downloaded the app, you could pay 199 for the lifetime. And then there's also discounts available as all good subscription sites app. But then there's the monthly fee of 2999 that you could be paying as well.

[Tim Stenovec]

So. Okay, so I could do 199 for life.

[Tim Allen]

Yeah.

[Tim Stenovec]

That's a lot less expensive than competitors such as Duolingo, which is, you know, that plus some, I think per year.

[Carol Massar]

So no catch. Come on. No catch. So Tim signs up, I mean, and that's provided you stick around. No, I'm not trying to say. But right. Like you got to be around, right?

[Tim Allen]

Yeah. Look, with any language learning there has to be a real commitment to it and you have to actually practice and utilize it. Right. But we see in. But life happens, right? The families. You know, I have kids. I'm learning German right now. Right. I've moved to Berlin for the job. I knew very little German altogether. But what I could tell you is I have life come up. The kids have school, the kids have activities. I will pick up, I will put down. I will pick up and put down. But the 199 are like, okay, interesting.

[Tim Stenovec]

We, I'm curious about duolingo and the competition that you see there. I'm wondering if you've considered moving outside of languages. We, we use duolingo at home, but more so for chess and reading with our kids. I don't know if it works, but it's great. The six year old has fun. Then we do for Spanish right now.

[Tim Allen]

Yeah, yeah. You hit the core market there, which is the games are great and they're great learning transmission, especially for the younger audiences. Right now our specialty is language learning where we're. We really focus on that. We, we focus on the transmission of language learning. We want to make sure that you have the most effective means in order to go from a zero to one conversation. And the way we look at that is you feel confident walking into a room and being able to know that you're speaking the language in which you're looking to speak. So we focus all of our linguistics, all of our teachers, all of the human centric pieces, and then we actually use AI as the tool to facilitate that in order to help make that happen faster. So Babel Speak is a good example of that. Where we continue to allow you to practice speaking, continue to allow value the conversations. But we're hyper focused there. We really think that the games really to other people, we're focused on the languages.

[Carol Massar]

You are. Okay, so that's a no. Like moving outside of languages. Okay.

[Tim Allen]

Yeah. Languages are sweet spot when it comes.

[Carol Massar]

To the AI spend. It's something we talk about a lot. Right. I'm curious about what you guys are spending. What are you spending it on? Is it on engineering? Talent is a data centers? Is it content? Is it something else?

[Tim Allen]

Yeah, we've been cash flow positive since 2011. It's a private company, so we're not out there raising capital. We are well funded, we're doing very well. Where we reinvest on our capex is we look for engineers, we're looking on AI talent, we're looking at the infrastructure, we're investing in what's going to actually transmit and actually forward the future. We actually think that this is an exciting time to be really looking at product features with our proprietary data set and our proprietary moats that we have inside of our ecosystem. You know, we have hundreds of millions of lessons completed a year. That's very rich data to be taking into proprietary LLMs and data models and really working inside of the AI to work towards the most effective product in terms of transmitting the language.

[Tim Stenovec]

Are you at this point able to use AI to create language courses? Are you able to use AI to do what humans used to do?

[Tim Allen]

In recent years, we actually married the two. You know where the real sweet spot was is not in removing people from creating the languages, it's facilitating the people to create the languages. So we do just answer your question directly. We do use AI, but we use it with the human centric piece. We've always found that our linguists and our also our teachers are the best to formulate all of the content so it can transmit better than anyone else and more effective. And so what we find is we marry the human with the AI tools. So we're using the blend of both worlds. We haven't replaced jobs in order just to replace jobs.

[Carol Massar]

All right, I've got one really, really important last question for you, Tim. How's the German going?

[Tim Allen]

Sure.

[Carol Massar]

How's the German going?

[Tim Allen]

You know, I beat back in the Deutsch, so using my babble every day, very little, but I'm learning very slowly. So.

[Tim Stenovec]

Okay, maybe next time. He's on. We do the interview in German. We get Matt Miller in here.

[Tim Allen]

I'm not I'm game.

[Carol Massar]

Matt would definitely do that really, really well. All right Tim, thanks so much. Fun to talk with you and get some time and hear what you guys are doing, especially when it comes to AI to incorporate and get in. Tim Allen, Chief Executive Officer of Babel, joining us from Berlin.

[Narrator/Announcer]

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[Lisa Mateo]

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[Tim Allen]

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[Tim Stenovec]

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